JISA’s

Dh6

Hi all,

I hold JISA’s for both of my children, they are two and six years of age. 

Realistically they won’t be needing them until they are around 20+ years of age so enough time to grow and compound hopefully.

My issue is that we are currently holding them inside cash JISA’s as we are very risk averse with the money held inside them for sentimental reasons.

I’d be happy to keep up with inflation with the money held inside but as NS&I have now slashed their rates that is no longer the case!

I understand I could potentially invest the money but would not like to see the capital value drop even for a short period of time. 

Am I being irrational and should I invest in a cautious fund or should I look for the best cash ISA rates and transfer in to them.

I’d appreciate any thoughts you may have.

Kind regards DH 

xylophone

I’d be happy to keep up with inflation with the money held inside but as NS&I have now slashed their rates that is no longer the case!

Coventry BS is still offering 2.95%.

Your children can have both a stocks and shares element and a cash element to their JISAs.

As a compromise you might consider keeping part of their money in cash and part in shares.

Fidelity has recently received favourable mentions in respect of their JISA.

https://monevator.com/passive-fund-of-funds-the-rivals/ might be worth a read.

https://moneytothemasses.com/quick-savings/parents/best-junior-stocks-and-shares-isa

Alexland

Provided you are willing to keep transferring the account between providers then it's still possible to beat inflation with the excellent cash JISA rates. At current asset valuations it's going to be very hard to beat those rates (after fees) with low to medium risk S&S based investments (in the medium term at least) and it doesn't sound like you would want to make a more adventurous investment for them.

Getting nearly 3% pa is still a very respectable result.

Seraphi

Dh6 said:

Hi all,

I hold JISA’s for both of my children, they are two and six years of age. 

Realistically they won’t be needing them until they are around 20+ years of age so enough time to grow and compound hopefully.

My issue is that we are currently holding them inside cash JISA’s as we are very risk averse with the money held inside them for sentimental reasons.

I’d be happy to keep up with inflation with the money held inside but as NS&I have now slashed their rates that is no longer the case!

I understand I could potentially invest the money but would not like to see the capital value drop even for a short period of time. 

Am I being irrational and should I invest in a cautious fund or should I look for the best cash ISA rates and transfer in to them.

I’d appreciate any thoughts you may have.

Kind regards DH 

Personally I think you are being irrational to the detriment of your kids. A couple of reasons:

• S&S JISA don't have be invested in gung-ho company holdings. Placing the money in a cheap global tracker is a pretty safe option if you are risk averse.
• If your investment horizon is more than 10 years then you'll comfortably ride any global downturn.

If it helps, I'm pretty conservative when it comes to money but my kids ISAs are S&S and in a global index tracker: https://www.morningstar.co.uk/uk/etf/snapshot/snapshot.aspx?id=0P0000RYLW

Last five years (Sept to Sept) the percentage gains have been 29.93%, 14.63%, 15.12%, 8.21% and 5.81%. Even if the next 10 years are all at the low end of that range, after compounding you can see how much worse off the money in your kids cash ISAs will be in comparison to the money in my kids S&S ISAs.